Question (1)

Lester Company sells many products. Below is an analysis of the inventory purchases and sales for the month of March. Lester Company uses the periodic inventory system.

Purchases Sales

Units Unit Cost Units Selling Price/Unit

3/1 Beginning inventory 100 $40

3/3 Purchase 60 $50

3/4 Sales 70 $90

3/10 Purchase 200 $55

3/16 Sales 80 $90

3/19 Sales 60 $90

3/25 Sales 40 $90

3/30 Purchase 40 $65

Instructions

(a) Using the FIFO assumption, calculate the amount charged to cost of goods sold for March. (Show computations)

(b) Using the LIFO assumption, calculate the amount assigned to the inventory on hand on March 31. (Show computations)

(c) Using the average cost assumption, calculate the amount assigned to the inventory on hand on March 31. (Show computations)

(d) Calculate the gross profit and gross profit ratio in FIFO and LIFO.